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Use the following information to answer questions 10-12.
General Candy, Inc., a U.S. firm, manufactures and sells candies worldwide. Because of a rising price of sugar in the U.S., the company is considering to build a new plant in the U.K. The plant will cost £15 million to build. Assume that the plant will have a life of 3 years before it is confiscated by the British government zero salvage value and the discount rate of the cash flows is 10%. Consider the following cash flows for this project.
Table 9.1:
-Refer to Table 9.1.Based on the net present value,
Trade Restraint
Any measure or policy that restricts international trade, including tariffs, quotas, and embargoes.
Predatory Pricing
is a competitive strategy where a company sets extremely low prices to eliminate competition and create a monopoly.
Monopolist
A monopolist is a single supplier in a market that has significant control over the price and supply of a particular good or service.
Market Entry
The act or strategy of bringing a new product or service to the market, facing various barriers to entry.
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